KOR

Research Staff

Research Staff

Lee, Sang Ho Research Fellow Capital Markets
Member of the Center, Digital Finance Research Center
Research Field

Profile

TEL
82-2-3771-0643
E-mail
sangholy@kcmi.re.kr
Education
Ph.D. in Accounting, Korea University (2019)
B.B.A., Korea University (2014)
Professional Experience
2019. 9. ~ Current, Research Fellow, Korea Capital Market Institute
2019. 3. ~ 2019. 8., Research Fellow, IBRE, Korea University
2017. 3. ~ 2020. 2., Lecturer, Korea University

Publications

Opinion

Establishment of IFRS 18 Presentation and Disclosure in Financial Statements: its Impact and Implications / Mar. 19, 2024
The International Accounting Standards Board (IASB) is poised to introduce a new standard, IFRS 18 Presentation and Disclosure in Financial Statements, scheduled to come into effect on January 1, 2027. IFRS 18 intends to define operating profit as residual income after deducting the investing and financing categories from the total. This definition deviates from the current K-IFRS operating profit in terms of amount and characteristics, which is determined by deducting the cost of goods sold and selling and administrative expenses from sales revenue, potentially causing confusion among information users. In an analysis of 31 countries, including the US and European countries, conducted from 1997 to 2019, the comprehensive presentation of operating profit through the residual category approach encourages a conservative representation of operating performance and significantly limits management’s discretion in classifying operating or non-operating profit. However, this shift is expected to curtail the persistence and value relevance of the represented operating profit, thereby reducing its usefulness for investors. To enhance the usefulness of operating performance information, it is crucial to consider introducing a subtotal for ordinary operating profit items based on extraordinary income information disclosed in financial statement footnotes. Additionally, careful examination and preparation are required to respond to the impact of the revised definition of operating profit on the regulatory framework in Korea.
A Potential Structural Shift in the Interest Rate Trend and Corporate Debt / Sep. 05, 2023
As credit risk has spiked in the private sector due to the recent rise in interest rates, destabilizing factors in the stock market, such as worsening profitability and bankruptcy risk, are accumulating. Even with the possibility of a structural shift in interest rates, it is unlikely to resolve market uncertainties quickly. But a comprehensive examination suggests that short- and long-term default risks in the corporate sector are hardly grave. Despite concerns about growing dependence on loans, chances are slim that the insolvency risk of corporate debt spreads across the financial system. This can be attributed to a conservative debt management strategy that requires companies to focus on financial solvency even in the face of swelling liquidity resulting from the Covid-19 crisis. However, it is noteworthy that low-cost debt was not fully utilized to realize growth potential under the low interest rate environment that continued after the 2008 global financial crisis, which requires a future-oriented discussion. In this respect, it is time to figure out how to effectively utilize corporate debt to break away from sluggish growth trends.
The Usefulness of ESG Disclosure based on Financial Materiality / Feb. 21, 2023
Amid soaring energy prices and higher inflation and interest rates, the anti-ESG movement opposing normative ESG activities has gathered the market’s attention and support in the United States. As corporate ESG strategies are expected to take concrete shape, it is also necessary for Korea to prepare for potential conflicts among stakeholders depending on ESG agenda. A comprehensive look at the value relevance of ESG activities for Korean firms reveals that only ESG activities with a strong relation to financial materiality guarantee future high stock returns. ESG activities rarely related to financial materiality are not only discouraged under the existing legal framework which aims to protect shareholder interest but are also difficult to gain consistent support from key stakeholders. Therefore, companies need to focus on ESG activities that are financially material. And the ESG disclosure system, which is to be phased in as a mandatory scheme starting from 2025, needs to identify and report financially material risks and opportunities that affect corporate value. Based on the system, it is necessary to promote a virtuous circle where improvement and disclosure of ESG performance serve as the source of sustainable financing.
Prolonged Trading Halts and Need for a Different Approach to Investor Protection / Aug. 24, 2022
Recently, prolonged trading halts are becoming more frequent in Korea’s stock market. As stricter audit standards have been introduced with the amendment to the Act on External Audit of Stock Companies, a growing number of trading halts have been issued. In addition, in most cases, trading would be resumed only after a contributing cause for a trading halt is resolved. From the perspective of investor protection, this could be understood as a desirable approach to protect investors from damage arising out of misrepresentation in financial statements. However, this also sparks concerns about extremely longer halts, property infringement and greater volatility, which requires investors’ extra caution. Protracted trading halts are not found in the US market because a trading halt would be, in principle, immediately lifted after any contributing cause is fully disclosed. Accordingly, in order to protect shareholders’ property right and guarantee continuity of trading by freely trading shares, the procedures for trading resumption should be improved in the Korean stock market. Amid information asymmetries, a trading halt should be used as an incentive to encourage full disclosure of new information over the long run. To this end, the Korean market should shift to a trading pause on the condition of disclosure of any material event, rather than seeking a prolonged trading halt that requires resolution of a contributing cause.

Other Activities

Research Papers
[International Journal Publications]
- "Do Competent Managers Hoard Bad News? Self-regulation Theory and Korean Evidence" (with Ji Yeon Ryu, and Sejoong Lee: Finance Research Letters (SSCI), 41: 101836, 2021)
- "Do Audit Efforts Increase the Future Equity Value of Client Firm?" (with Seung Uk Choi, and Ji Yeon Ryu: Managerial Auditing Journal (SSCI), 36(1): 132~166, 2021)
- "Corporate Tax Avoidance and the Cost of Equity Capital: International Evidence" (with Hong Min Chun, Grace Il Joo Kang, and Yong Keun Yoo: Applied Economics (SSCI), 52(29): 3123~3137, 2020)
- "Real Earnings Management and the Cost of Debt Capital: International Evidence" (with Ji Hye Kim, and Yong Keun Yoo: Asia-Pacific Journal of Accounting & Economics (SSCI), 27(2): 151~172, 2020)

[Korean Journal Publications]
- "The Usefulness of Material Disclosure on ESG Activities" (Written in Korean; with Hee-Yeon Sunwoo, Woo-Jong Lee, and Inhyung Lee: Korean Accounting Review, 47(6): 59~86, 2022, Corresponding Author)
- "ESG Disclosure Incentive: Voluntary or Washing?" (Written in Korean; with Jae Yeon Sim, and Ji Yeon Ryu: Review of Accounting and Policy Studies,  27(1): 249~274, 2022, 1st Author)
- "The Effect of Zombie Leverage at Low Costs on the Productivity of Non-Zombie Firms" (Written in Korean; with Ji Yeon Ryu: Review of Accounting and Policy Studies,  26(1): 125~156, 2021, 1st Author)
- "The Study on the Explanatory Variables of Cash Crunch Risk and the Prediction of Delisting for the COVID-19 Demand Shock" (Written in Korean; with Kwang Bok Hue, and Taedong Kim: Review of Accounting and Policy Studies,  25(4): 145~170, 2020, 1st Author)
- "The Effect of Labor Union and Full-time Employee Ratio on Labor Cost Behavior for Korean Manufacturing Firms" (Written in Korean; with Jin Bae Kim: Korean Journal of Management Accounting Research, 19(2): 1~26, 2019, 1st Author)
- "Audit Opinions and Legal Environments: An International Investigation" (Written in Korean; with Ji Yeon Ryu, and Yong Keun Yoo: Review of Accounting and Policy Studies, 24(2): 1~24, 2019, Co-author)
- "The Association between Accounting Comparability and Unfaithful Disclosure Firm" (Written in Korean; with Bo Young Moon, Ji Yeon Ryu: Journal of Taxation and Accounting, 19(4): 171~214, 2018, 1st Author)
- "Timeliness of Accounting Earnings and Market Anomaly" (Written in Korean; with Ji Yeon Ryu, and Seung Uk Choi: Korean Management Review, 47(4): 753~781, 2018, Co-author)
- "The Relation between Abnormal Audit Fees and Market Anomaly: Do Investors Perceive Abnormal Audit Fees?" (Written in Korean; with Seung Uk Choi: Korean Accounting Journal, 27(1): 1~37, 2018, 1st Author)
- "Problems and Recommendations for Government Performance Evaluation on Taxation policy" (Written in Korean; with Manwoo Lee, and Jun Yong Shim: Journal of Taxation and Accounting, 18(6): 285~309, 2017, Corresponding Author)
- "The Relationship between the Inherent Risk of Detailed Accounts and External Audit Hours, Audit Fees and the Hourly Fee Rate - An Analysis before and after K-IFRS Adoption and Whether the Auditor is Big4 or not" (Written in Korean; with Seok Woo Jeong, and Nam Chul Jung: Study on Accounting, Taxation & Auditing, 59(3): 77-122, Co-author)
- "The Effect of Accounting Conservatism on Future Stock Price Crash Risk - The Moderating Effect of Financial Statements Comparability and Information Asymmetry" (Written in Korean; with Seung Uk Choi: Korean Management Review, 46(2): 561-594, 2017, 1st Author)
- "The Effect of Real Earnings Management on Future Stock Price Crash Risk" (Written in Korean; with Chang Seop Rhee, and Jaeyon Chu: Korean Management Review, 46(1): 287-313, 2017, 1st Author)

[Working papers under review or revision]
- "Internet Penetration and Accruals Earnings Management: International Evidence" (with Tony Kang, Ji Yeon Ryu, and Yong Keun Yoo)


Awards
- Awarded by the Chairperson of the Korea Exchange, 2023
- Best Research Report, Korea Capital Market Institute, 2021
- Best Research Report, Korea Capital Market Institute, 2020
- Deloitte Academic Research Award, Korean Accounting Association · Deloitte Anjin LLC, 2020
- Seok-top Teaching Award, Korea University, 2019 Fall(*2), 2019 Spring, 2018 Fall
- Outstanding Teaching Award, Korea University, 2018 Spring
- Distinguished Research Award, IBRE, Korea University, 2018
- The Best Paper Award, Study on Accounting, Taxation & Auditing, KICPA, 2017